Consumer Affairs Victoria v Cohen [2014] VCAT 220 | Case summary

Pursuant to section 28A(1)(a) of the Estate Agents Act 1980 (Vic) (Act), the respondent is reprimanded.
Pursuant to section 28A(1)(b) of the Act, the respondent is required, at his own expense and within twelve months from the date of these orders, to undertake or to retake (as the case may be), the following units of study from an approved registered training organisation or to have substantially similar professional ethical training provided by a firm of solicitors or real estate industry professional organisation:
- CPPDSM4007A - Identify legal and ethical requirements of Property Management; and
- CPPDSM4008A - Identify legal and ethical requirements of Property Sales.
Pursuant to section 28A(1)(b) of the Act, the respondent is required, at his own expense, to notify the applicant, in writing within seven days of the occurrence of the following events, providing sufficient evidence of (including any certificates or any other documents that can be used to verify the occurrence of those events):
- his enrolment in the above-named units of study or the retention of a firm of solicitors or other professional organisation for training purposes, as the case may be;
- his successful completion of each of those units of study or of any specialist training, as the case may be.

On 17 December 2013, I determined that the respondent had contravened or failed to comply with both limbs of regulation 13(2) of the Estate Agents (Professional Conduct Regulations) 2008 (Vic) (Regulations).[1] The regulations are made under the Estate Agents Act 1980 (Vic) (Act). The parties made submissions relevant to what determination I might make as a result.[2]
The High Court has very recently held that the previous practice in Victorian criminal cases of courts hearing submissions from the prosecution about the bounds of the available range of sentences, should be discontinued.[3] The court's decision was handed down after written submissions in this case were provided and the date for the penalty hearing was set. To the extent that the court's reasoning applies to disciplinary cases, I note that there are no cases from which to draw an available range here as the facts of this case are quite novel and there is no similar precedent for it. The applicant made submissions expressing an opinion about the precise penalties I should impose. In any event, for the reasons given, the disposition reached does not mirror that contended for by the applicant.
In imposing disciplinary penalties, I must have regard not so much to punishment of the respondent as to protection of the public.[4] Another objective is the maintenance of professional standards of the relevant profession.[5] Therefore, protection of the profession is also relevant.[6]
Other relevant factors are the risk of repetition of the conduct in the future, and deterrence. Deterrence includes both general deterrence (of others) and specific deterrence (of the respondent himself).[7]
Mr Tziotis for the applicant referred to several cases in support of the relevance of these factors, including cases imposing penalties on health professionals. The respondent submitted that there is a distinction between himself as a real estate agent and cases concerning health professionals. He argued that his conduct (as found) was much less serious than that of (say) a doctor who had engaged in conduct causing or potentially causing serious injury or death.
The general propositions established for disposition in cases of a disciplinary nature concerning other professions are clearly relevant and of assistance in considering the appropriate determination here. All professional disciplinary cases have their own unique facts and are to be determined on their own merits.
Taking into account the principles referred to above, I consider that a reprimand is appropriate in light of the respondent's conduct, which resulted from a conversation at an auction with an onlooker (who happened to be the vendor's daughter in law). As stated in my earlier decision, the respondent was attending the auction as an estate agent who had had earlier contact with the vendor. He had appraised the property but been unsuccessful in obtaining the authority to auction. It was likely he had expressed an interest in being property manager for the property. The respondent had engaged in this conduct as a licensed estate agent, which placed a greater onus on him to do nothing at the auction that might in any way detract from its success. Even without his prior involvement with the property, as a licensed estate agent the respondent had that obligation.
A reprimand is a serious sanction. It is justified in light of the inappropriateness of the comments I found the respondent made to the vendor's daughter in law (to the general effect that there was water leaking or seeping into the garage and water problems in the garage). A reprimand operates to provide general and specific deterrence.
An order for the respondent to undertake education or re-education (as the case may be) is appropriate. Such education directly addresses protection of the public, ensuring that the respondent will have (as he says he has) 'learnt his lesson'. That learning process will be assisted by completion of courses, which requires an ongoing time commitment for a defined period.
Initially, the applicant submitted that the respondent should undertake the two courses referred to in the order I have made, with a third course. The respondent did not wish to do these courses because he considered they involved training in basic sales and property management for a junior estate agent who lacks his years of experience.
I invited the parties to discuss the matter, after which they jointly submitted a list of three courses, the first two as alternatives. These courses are entitled 'Minimise agency and consumer risk', 'Manage conflicts and disputes' and 'Interpreting legislation to complete agency work'. At my request, the applicant provided outlines of all courses. No outline was provided for the last mentioned one. Having perused the outlines of the other courses, I consider that those most appropriate for the respondent to be required to complete are not those on which the parties agreed, but those entitled 'Identify legal and ethical requirements of property sales to complete agency work' and 'Identify legal and ethical requirements of property management to complete agency work'. Those two courses contain the most focus on ethical requirements of practice as a real estate agent. In my opinion they are the most relevant to addressing the impugned conduct, even as a general reminder of the basic ethical requirements of being an estate agent.
I impose a financial penalty of $5,000, the maximum such penalty available in this case. The respondent indicated he would be able to pay such an amount within six months, and the order allows for that. The respondent gave evidence that he has already suffered a significant financial burden as a result of the proceeding. He says he has lost several clients and suffered detriment as a result of the newspaper article that followed publication of my reasons for decision. He put a figure of $35,000 on his overall financial loss as a result of the case, describing it as 'lost business revenue and costs'. However, the respondent provided no further detail of how this figure was reached. Nevertheless, I consider the $5000 penalty to be appropriate taking into account the necessity for general and specific deterrence and the fact that the respondent has six months to pay.
The respondent says he has already suffered significant detriment by publication of the newspaper article referred to above. He submitted that the publicity had impacted he and his family, that his family had been targeted on Facebook.
A natural consequence of hearings being open to the public, is that reasons for decision are published and able to be accessed by the public including the media. I explained to the respondent why I did not make an order closing the hearing or otherwise suppressing information about it including his name, when his application for that came to my attention. I explained that I would not have made such an order had that application come to my attention before the hearing in November last year.
I consider that the orders made are sufficient to protect the public and provide sufficient deterrence. The applicant sought further orders that the respondent also provide a written apology to the Coopers and that he enter into an undertaking.
I agree with the respondent's submission that the wording of the proposed undertaking was very broad. It was essentially not to make comments about properties the respondent is not engaged to sell, to attendees at auctions, either before, during or after the auction.
Mr Tziotis suggested rewording the undertaking to prohibit the respondent from talking to persons who attend auctions, either immediately before or immediately after the auction. The respondent pointed out that if he were engaged to act as a buyer's advocate, that engagement would require him to give an opinion about a property he was not engaged to sell, which could breach the undertaking as worded. Mr Tziotis submitted that that scenario should not be covered. However, I consider there are too many uncertainties in the drafting. If the respondent is to give an undertaking, he should know exactly what he is undertaking to do, or not to do. I was not presented with a clear alternative form of wording that remedied the uncertainties. I decline to make the order sought.
It might be observed that the respondent has not shown remorse in relation to his conduct. However, his lack of remorse is consistent with own factual version of the conversation with Mrs Cooper. I rejected that version in my findings. In those circumstances, it is difficult to expect the respondent to show remorse for something he maintains he never said. Accordingly, I regard the 'remorse factor' as a neutral one.
In these circumstances, I also decline to require the respondent write a letter of apology to the Coopers. He has said he would not write such a letter. Therefore, if he were required to give an apology, it would not be a sincere one. Further, I consider that the purposes of protection of the public and deterrence are sufficiently addressed by the other orders made.
The respondent received a warning letter dated 8 February 2012 from the applicant in relation to a previous unrelated complaint. The complaint leading to that warning is in evidence.[8] Mr Tsiotis did not dwell upon the facts alleged in it, correctly noting that the allegations have not been proved. It is relevant to take into account that as a result of this complaint the respondent was previously warned that the applicant reserved the right to take enforcement action if further complaints were received in the future.
The respondent submitted that the applicant has unduly delayed in investigating the Coopers' complaint and applying to the Tribunal. He referred to a twelve-month delay overall. However, Mr Tziotis confirmed that nine months had expired from the date of the complaint (27 August 2012) to the date of the application to VCAT (28 May 2013). That period is not excessively long. To the extent that any delay might be taken into account in disposition, it is not a factor here.
The respondent requested that any disposition orders not be made before investigation of a complaint he will make to the Minister for Consumer Affairs about how the applicant has dealt with him. Clearly, it is not appropriate to await the outcome of any such investigation, which is entirely separate from this proceeding.
Whilst the respondent chose not to provide independent character evidence, he gave evidence of having assisted the local community in opposing a planning development. I have no reason to doubt that he did so, nor that he is a person who is community minded. I consider the overall disposition arrived at is appropriate taking into account that and the other factors noted above.

Consumer Affairs Victoria v Cohen

At a glance

Court

Decision date

Before

Source

Judgment (14 paragraphs)

Consumer Affairs Victoria v Cohen (Review and Regulation) [2014] VCAT 220 (6 March 2014)

Parties